NEW YORK (TheStreet) -- Shares of Priceline Group (PCLN), and Expedia (EXPE) are trading higher after Piper Jaffray (PJC) said its analysis of travel industry data indicates a "material improvement" in U.S. industry trends in the second quarter through May.
Shares of Priceline are up 1.11% to $1,202.48, and shares of Expedia are up 3.23% to $76.99 in pre-market trading on Tuesday.
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Piper reiterates an "overweight" rating on Priceline, and says it is "increasingly constructive" on Expedia which is rated "neutral."
TheStreet Ratings team rates PRICELINE GROUP INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PRICELINE GROUP INC (PCLN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.4%. Since the same quarter one year prior, revenues rose by 26.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although PCLN's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 5.14, which clearly demonstrates the ability to cover short-term cash needs.
- Powered by its strong earnings growth of 31.30% and other important driving factors, this stock has surged by 51.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PCLN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- PRICELINE GROUP INC has improved earnings per share by 31.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PRICELINE GROUP INC increased its bottom line by earning $36.01 versus $27.71 in the prior year. This year, the market expects an improvement in earnings ($52.31 versus $36.01).
- The gross profit margin for PRICELINE GROUP INC is currently very high, coming in at 85.67%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.17% significantly outperformed against the industry average.
- You can view the full analysis from the report here: PCLN Ratings Report